National Prosper Where You Are Planted Month on September, 2019: How was Canada effected economically after world war one?

September, 2019 is National Prosper Where You Are Planted Month 2019. Unusual Holidays: National “Prosper Where You Are Planted” Month Ever heard of National Prosper

1914–1918 – Effects of World War I on the Canadian Economy

On August 4, 1914, World War I began when Britain, France and Russia declared war on Germany and the Austro-Hungarian Empire. More than 600,000 men, about 20% of the pre-war labour force, were in uniform at a time when the total population of Canada was less than 8 million. At least 60,000 Canadians lost their lives in Europe, and many more were wounded. At home, the production of military goods expanded dramatically to fulfill the war demands.

In the early years of the war, Canada’s economic situation was bleak. In 1914, wheat yields plunged because of a severe drought. In 1914 and 1915, more than 50,000 people lost their jobs as the railway sector floundered under massive amounts of debt. Furthermore, construction and building activities shrank substantially from a lack of capital.

With the outbreak of the war, however, demands for soldiers, nurses, farm labourers and factory workers increased simultaneously. In the later years of the war, Canada’s agricultural output increased markedly because of favourable weather, and Canada exported huge quantities of wheat to the United Kingdom. Prime Minister Robert Borden initiated the new War Measures Act, which provided the government sweeping powers to do whatever it deemed necessary in the war effort. To provide war armaments to the allied armies, the government created the Imperial Munitions Board (IMB). By 1916, the IMB became Canada's largest employer, with 250,000 workers.

The IMB produced around one million shells a month, about a third of what the British armies were using on the western front. Maritime shipyards ran in full swing to manufacture submarines, and there were more than 100 plants across the country producing airplane parts. By 1916, unemployment virtually disappeared, and acute shortages of labour were felt in every sector of the economy. A large number of women homemakers moved into the work force.

The war placed an unprecedented drain on the financial resources of Canada. By 1915, military spending alone equalled the entire government expenditure of 1913. In 1918, the federal government’s war outlay was more than $2.5 million a day. As a result, the government’s budget deficit rose from 10% of gross national product (GNP) in 1913 to around 15% during the war, when both the deficit and GNP grew rapidly.

Prior to the war, the federal government’s main source of revenue was tariffs collected on imported goods. However, as war dragged on, it became evident that new sources of funds were essential. The government issued bonds such as Victory Bonds, which alone generated close to $2 billion from patriotic Canadians during the war years. Furthermore, the Government imposed taxes on many items including tobacco, alcohol, transport tickets, and patent medicines.

The Business Profits War Tax Act of 1916 required all Canadian corporations with $50,000 or more in capital to file a yearly tax return. In 1917, the Income War Tax Act introduced a ‘temporary’ tax on corporate and personal income. After the war, the government was paying $164 million a year in interest on the debt created during the war, and $76 million per annum in soldiers’ pensions. This was more than the entire federal budget before the war. As a result, income tax became a regular feature of the Canadian economy.

Once the war ended in November 1918, so did the heightened demand for goods and services. Although auto plants prospered, most other factories such as chemical and steel were shutting down, triggering unemployment. It took 10 years for manufacturing output to recover to wartime levels. Even those with jobs had difficulty in maintaining their standard of living as prices rose rapidly.

Some returning soldiers went back to the farm. Others found work in the services sector which had surpassed agriculture as the largest employer of Canadians just as war was breaking out. The Canadian economy underwent significant changes during World War I, but when peacetime returned, aside from the introduction of income tax and the rise of the services sector, it was more or less back to business as usual.

Why did people loose jobs after WWI in Canada?

1914–1918 – Effects of World War I on the Canadian Economy

On August 4, 1914, World War I began when Britain, France and Russia declared war on Germany and the Austro-Hungarian Empire. More than 600,000 men, about 20% of the pre-war labour force, were in uniform at a time when the total population of Canada was less than 8 million. At least 60,000 Canadians lost their lives in Europe, and many more were wounded. At home, the production of military goods expanded dramatically to fulfill the war demands.

In the early years of the war, Canada’s economic situation was bleak. In 1914, wheat yields plunged because of a severe drought. In 1914 and 1915, more than 50,000 people lost their jobs as the railway sector floundered under massive amounts of debt. Furthermore, construction and building activities shrank substantially from a lack of capital.

With the outbreak of the war, however, demands for soldiers, nurses, farm labourers and factory workers increased simultaneously. In the later years of the war, Canada’s agricultural output increased markedly because of favourable weather, and Canada exported huge quantities of wheat to the United Kingdom. Prime Minister Robert Borden initiated the new War Measures Act, which provided the government sweeping powers to do whatever it deemed necessary in the war effort. To provide war armaments to the allied armies, the government created the Imperial Munitions Board (IMB). By 1916, the IMB became Canada's largest employer, with 250,000 workers.

The IMB produced around one million shells a month, about a third of what the British armies were using on the western front. Maritime shipyards ran in full swing to manufacture submarines, and there were more than 100 plants across the country producing airplane parts. By 1916, unemployment virtually disappeared, and acute shortages of labour were felt in every sector of the economy. A large number of women homemakers moved into the work force.

The war placed an unprecedented drain on the financial resources of Canada. By 1915, military spending alone equalled the entire government expenditure of 1913. In 1918, the federal government’s war outlay was more than $2.5 million a day. As a result, the government’s budget deficit rose from 10% of gross national product (GNP) in 1913 to around 15% during the war, when both the deficit and GNP grew rapidly.

Prior to the war, the federal government’s main source of revenue was tariffs collected on imported goods. However, as war dragged on, it became evident that new sources of funds were essential. The government issued bonds such as Victory Bonds, which alone generated close to $2 billion from patriotic Canadians during the war years. Furthermore, the Government imposed taxes on many items including tobacco, alcohol, transport tickets, and patent medicines.

The Business Profits War Tax Act of 1916 required all Canadian corporations with $50,000 or more in capital to file a yearly tax return. In 1917, the Income War Tax Act introduced a ‘temporary’ tax on corporate and personal income. After the war, the government was paying $164 million a year in interest on the debt created during the war, and $76 million per annum in soldiers’ pensions. This was more than the entire federal budget before the war. As a result, income tax became a regular feature of the Canadian economy.

Once the war ended in November 1918, so did the heightened demand for goods and services. Although auto plants prospered, most other factories such as chemical and steel were shutting down, triggering unemployment. It took 10 years for manufacturing output to recover to wartime levels. Even those with jobs had difficulty in maintaining their standard of living as prices rose rapidly.

Some returning soldiers went back to the farm. Others found work in the services sector which had surpassed agriculture as the largest employer of Canadians just as war was breaking out. The Canadian economy underwent significant changes during World War I, but when peacetime returned, aside from the introduction of income tax and the rise of the services sector, it was more or less back to business as usual.